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U.S. Oil/Gas Companies Take Action To Reduce Climate Change Risks

March 17, 2005 – After extensive negotiations with shareholders, Anadarko Petroleum, Apache, ChevronTexaco and three other leading U.S. oil and gas companies have taken far-reaching actions in recent months to disclose their potential financial exposure from climate change and develop strategies to improve their strategic positioning as international pressure grows to reduce greenhouse gas emissions and promote renewable energy sources.

After extensive negotiations with shareholders, Anadarko Petroleum, Apache, ChevronTexaco and three other leading U.S. oil and gas companies have taken far-reaching actions in recent months to disclose their potential financial exposure from climate change and develop strategies to improve their strategic positioning as international pressure grows to reduce greenhouse gas emissions and promote renewable energy sources.

The company actions come in the wake of record-high voting support last year for shareholder resolutions seeking more climate risk disclosure from oil and gas companies, which face growing regulatory, competitive and public pressure to reduce their reliance on fossil fuels and other greenhouse gas emitting energy sources. Shareholder resolutions with Apache Corp., Anadarko Petroleum Corp. and Marathon Oil Corp. all received record voting support last year, with support at Apache reaching 37 percent.

In addition to acknowledging more publicly that global warming is a serious issue that requires action, six of the country's largest oil and gas companies are pursuing or have agreed to pursue a wide range of actions that investors believe will reduce companies' exposure to climate risk and better position them competitively in the years ahead. These agreements encompass a range of items, including:

As a result of these actions, shareholders, many of them members of the Interfaith Center on Corporate Responsibility, have agreed in the past two weeks to withdraw climate change shareholder resolutions filed with ChevronTexaco Corp., Anadarko Corp., Apache Corp., Unocal Corp and Tesoro Corp., The Marathon Oil Corp. has also agreed to boost its climate risk disclosure, which resulted in shareholders deciding not to file a climate change resolution with the company this year.

"Most of the oil and gas companies are taking climate change much more seriously than they were just a year ago," said Mindy Lubber, president of Ceres, an investor coalition that has helped coordinate the shareholder resolution filings with the oil and gas companies. "These disclosure commitments are only a beginning, but there's a much broader recognition from companies that climate change is a serious issue with serious financial consequences for investors if it isn't well managed."

Two global warming resolutions are still pending with the ExxonMobil Corp. and are expected to go to a vote at the company's annual meeting this spring. The resolutions request that: the board of directors review and publish how the company will meet greenhouse gas reduction targets in countries that have adopted the Kyoto Protocol; and provide research data from the company relevant to the company's stated position on the science of climate change. Climate change resolutions are also pending with XTO Energy Inc. and Vintage Petroleum.

Specifics on the company commitments and actions are as follows:

Anadarko Petroleum

Trillium Asset Management Corp. agreed to withdraw its resolution this month based on the following actions from Houston-based Anadarko:

Acknowledging publicly on the company web page that the impact of greenhouse gas emissions is a growing concern and that reducing those emissions is a responsible action.

Formation of a Climate Change Committee comprised of employees in various disciplines within the company to evaluate and advise management on climate change and GHG issues. The committee will report annually to the board of directors.

Discuss the company's strategies for managing climate risk in its 10-K securities filings with the Securities and Exchange Commission.

Using carbon constrained scenario planning as part of long-term strategic planning.

Minimize greenhouse gas emissions through various technologies such as enhanced oil recovery. Two Wyoming enhanced oil recovery projects will ultimately re-inject about 29 million tons of carbon dioxide into aging oil fields, a form of carbon sequestration. The project will be one of the largest of its kind in the world.

"It has become clear to us in the past year that Anadarko is evaluating the risks and opportunities posed by climate change more seriously than ever," said Shelley Alpern, director of social research and advocacy at Trillium Asset Management Corp. "We're pleased to see Anadarko undertaking an inventory of its greenhouse gas emissions for the first time this year and will encourage the company to set reduction targets once the baseline has been established."

The withdrawn Anadarko resolution asked an independent committee of board members to assess how the company was responding to rising regulatory, competitive and public pressure to reduce greenhouse gas emissions. Last year's resolution at Anadarko received 31 percent support.

Apache Corp.

Boston Common Asset Management agreed to withdraw its resolution with Houston-based Apache Corp. after the company agreed to:

Report on its annual greenhouse gas emission intensity from its operated projects in the Kyoto I annex countries of the United Kingdom and Canada, as well as from facilities in Australia and the United States. Reporting will begin in 2006, based on 2005 calendar year data.

Report annually on its GHG projects, initiatives and issues annually to Apache's board of directors.

Describe and report the progress of all major GHG projects and initiatives worldwide on its website.

"We are encouraged that Apache has now committed to disclose key information, such as GHG emissions data, that we believe will enable shareholders to evaluate its progress on climate change versus its peers," said Steven Heim, director of research at Boston Common Asset Management. "We will continue to press Apache in the coming years for a rigorous response to the threats that climate change poses to its long term business and shareholder value. "

The withdrawn resolution asked an independent committee of board members to assess how Apache was responding to rising regulatory, competitive and public pressure to reduce greenhouse gas emissions

ChevronTexaco

Investors cited the following commitments and activities underway at San Ramon, Calif.-based ChevronTexaco in withdrawing their resolution:

Public acknowledgment on the company web site that the use of fossil fuels has contributed to an increase in greenhouse gases and that there is a widespread view this increase is leading to climate change with adverse effects on the environment.

Developing a long-term greenhouse emission profile.

Setting an absolute greenhouse gas emission goal consistent with the company's strategy of reducing greenhouse gas emissions. In 2004, the company set a goal to reduce its emissions by 900,000 metric tons over 2003.

Publicly report on renewable energy investments in wind, solar and other renewable energy sources by the end of the year.

Factoring carbon costs into capital allocation decision-making and new investments.

"ChevronTexaco has come a long way in acknowledging the threat global warming poses for businesses and the steps needed to better position the company in the years ahead," said Sister Patricia Daly, OP, executive director of the Tri-State Coalition for Responsible Investment, a coalition of investors with the Interfaith Center on Corporate Responsibility, that withdrew its shareholder resolution last week. "While there's room for improvement, these commitments move the company in the right direction. We will continue to work with the company to build more momentum on renewables and other business strategies to address global warming."

The withdrawn ChevronTexaco resolution requested that the board prepare a report explaining how the company was responding to rising regulatory, competitive and public pressure worldwide to significantly boost renewable energy sources.

Tesoro Corp.

The United Methodist Church's General Board of Pension and Health Benefits agreed to withdraw its resolution with the San Antonio, Texas-based Tesoro Corp., one of the nation's largest independent refiners, after the company agreed to:

Complete installation of software at each of its six refineries to establish a baseline for total current greenhouse gas emissions.

"The General Board is encouraged that the Tesoro Corporation is responding to climate change and is assuming its fiduciary responsibility to assess climate risk by measuring, monitoring and publicly reporting greenhouse gas emissions from its refiner operations," said Vidette Bullock Mixon, director of corporate relations at the General Board of Pension and Health Benefits. "As a concerned investor, the General Board challenges Tesoro to expeditiously establish greenhouse gas emission reduction objectives."

Marathon Oil

After winning 27 percent voter support for a resolution last year, the United Methodist Church's General Board of Pension and Health Benefits (GBOP) decided not to file a resolution for this year's annual meeting after Houston-based Marathon agreed to:

Assemble 12 key staff, including three of the top 15 officers of the company, to meet with GBOP representatives and discuss issues raised in the 2004 resolution.

Publish a sustainability report in May 2005 and begin GHG emission reporting, also in 2005.

Company has stated a strategic commitment regarding profit opportunities in a carbon-constrained world, particularly with natural gas and gas utilization technologies.

Significant progress in reducing flaring, a major source of greenhouse gas emissions and a threat to public health.

Unocal

Christian Brothers Investment Services agreed to withdraw its resolution with Unocal as a result of the following actions by the company to address GHG emissions:

Created a high level Climate Change working group made up of top level executives, including the CEO and CFO, and heads of operating units. The group is charged with monitoring developments relating to climate change and recommending firm strategy on this issue.

Acknowledges climate change as a risk in its 10-K report and has a public website devoted to its efforts to mitigate climate change.

Commitment to participate in carbon trading regimes and has a dedicated staff member to manage its efforts in this area.

Developed about 2,500 MWH of geothermal energy and continues to develop new sources of geothermal.